European semiconductor distie market sales fall

The first half of 2012 saw a decrease in the European semiconductor distribution market, with sales failing to match the same period of 2011.

According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), 2012 ended with a decline of 10.8 percent and total sales revenues of €5.7 billion, compared to the same time in 2011.

Malcolm Penn, CEO at analyst house Future Horizons, told TechEye the results were either a “sad reflection of the trend to outsource manufacturing from Europe”, mostly to Asia, or the tendency to “give up completely and exit the markets which in turn reduces the demand to for semiconductor devices and sales”.

“Distribution is at the sharp end of this demand, and we’ve seen the European chip market decline to just 11.4 percent of the total worldwide sales, half what it was 20 years ago in the mid 1980s,” Penn said. “Europe’s GDP is around 23 percent of the world total, so our manufacturing effort is half what it should be on a per-GDP basis, tragic”.

Georg Steinberger, chairman of DMASS said the results reflected a market of high price pressure and huge swings in demand and supply. He said while the situation is “unfortunate” it wasn’t unforeseeable. He pointed out that despite the disappointing results, 2012 was still the second best year in distribution history.

Regionally, the situation was different to previous years. While in 2010 and 2011 Germany and Eastern Europe were constantly gaining share against other Western Regions, in 2012 Germany faced a steep decline of 16.2 percent.

DMASS said Germany’s share of the total market went from 34 percent to 31 percent, which could have been attributed to the sectors it operated in. This was compared to Eastern Europe which grew by over eight percent and included Russia, which alone grew by 16 percent.